It looks as though the financial markets have taken a look at Greece's proposal's to cut debt, looked at the Eurozone and IMF bailout package and decided that Greece will not be able to afford its debts over the next few years without a lot of bailouts which are still in the process of being organised. As a result, their credit rating has been downgraded to junk status.
Effectively, Greece can no longer afford to service its own debt.
Any bailout is now going to depend on Germany being prepared to support the Euro and pay for it. Understandably, Germany is not really happy about this and are refusing to pay out until Greece comes up with a credible plan for reducing their debt. With the downgrade, that may no longer be possible.
The knock on effects from this could be the following.
Greece gets kicked out of the Euro and allowed to devalue. They were not exactly honest when they applied for membership of it and as a result, their fiscal policy is going to be run from Brussels, or more likely Berlin.
Portugal and Spain also have economies in a similar situation. Once Greece is resolved, the markets are likely to look at those two countries with an eye to making some easy money at government expense.
So, is any of this being reported outside of Europe?
Does it worry anyone that a country which should have been in reasonable financial state is about to go bankrupt?
Do the markets have too much power when events like this occur?